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Sunday, April 3, 2016

2/4/16: Tsipras: Europe's Cross of Forest Gump and Donald Trump

The tragedy of Europe is the comedy of Europe. And it is best illustrated in the case of Greece, or by Greece, where the latest debt-related scandal is telling us more about the infinite degree of European leaders' tupidity and outright lack of duty of care for their own citizens and societies than anything Kafka could have contrived.

The basis for the scandal is the following:

Act 1: IMF staff had a conference call discussing their engagement with the European Institutions in renewing the Greek bailout deal that is due to be renewed (from IMF side) in April. Now, as a precondition to this conversation we have:

Greece is carrying to much debt after the 'breakthrough' deal 'achieved' last summer and it cannot repay all this debt.

IMF knows as much and said as much officially

IMF also knows, and has publicly declared this before, that Greek debt can only be made sustainable by European authorities engaging in debt restructuring for Greece that introduces real haircuts on debt.

Thus, IMF position going into April is to support Greek economy's objective of attaining debt relief from European 'partners'

IMF are the good guys for Greek economy (as far as anyone in the game can be a good guy, of course).

Act 2: At the call, details of which were leaked, IMF officials discussed between themselves a possibility for the Fund taking a hardline position with respect to European Institutions in an attempt to influence them to give Greece debt relief. Which means that:

IMF was considering strong-arming Europe into doing the right thing for Greece; and

Greece would have benefited socially and economically if IMF were successful in what was discussed

One, Tsipras is livid with the IMF discussing the tactic that could help Greek people by reducing the unsustainable debt burden they are forced to carry courtesy of the EU. The PM of an excessively indebted nation forced onto its knees by collapsed economy and debts is actively fighting against an idea of giving help to that economy. And he is doing so despite the fact that this debt relief was his own electoral platform! The lad is certifiable.

Two, Tsipras if livid that someone leaked the transcript of the conversation, because, presumably in Europe, when a tree falls in a forest no one cares - out of sight = out of mind. It is the public embarrassment for a PM who barked at the IMF all along despite the fact that the IMF was all along his only friend in the entire EU-led fiasco of debasing the Greek economy. The embarrassment of being shown publicly to be damaging to his own society and economy. The lad is venal.

This latest three-acts Greek drama is beyond any comparative I can think of in modern history. If the Greek people ever wanted a PM who can throughly destroy the entire Greek society whilst shedding crocodile tears at the loss, they could not have invented a protagonist villain functional enough to match Tsipras.

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This blog represents my personal views and is not reflective of the views or opinions held by any company, contractor, client or employer I work for currently or have worked for in the past. These views are not an endorsement to take any action in the markets or of any political position, figures or parties.

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